TradeComet complaint against Google dismissed

Geoffrey Manne —  9 March 2010

TradeComet’s antitrust suit against Google has been dismissed by the S.D.N.Y. Court in which the case was being heard.  The opinion is available here.

The holding:

Google has now moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(3) for improper venue based on a forum selection clause in the parties’ advertising contracts. Because TradeComet’s claims fall within the scope of the relevant forum selection clause that requires that this action be brought in California, and because enforcing that clause would be neither unreasonable nor unjust, Google’s motion to dismiss is granted.

Of course this does nothing to the substantive claims, but it does require that they be brought–if they are brought again at all–in Santa Clara County, CA (as the forum selection clause dictates).

Of more interest to law . . talking . . guys may be the following:

TradeComet contends that the forum selection clause is unconscionable because—it claims—Google enforces it selectively, it is found within a contract of adhesion, and it would force TradeComet to litigate its claims in Google’s “backyard.”

To me these claims are meritless on their face.  The court also had no trouble dismissing them and here–citations omitted–is the court’s complete response to the claims:

However, TradeComet offers neither evidence to support its allegation of selective prosecution nor legal authority indicating that such behavior—if true—would make a forum selection clause unconscionable and thus unenforceable. Additionally, the fact that the August 2006 Agreement may or may not be a contract of adhesion does not invalidate its forum selection provision.  Finally, although litigating these claims in California rather than New York likely will be more burdensome for TradeComet, which has its principal place of business in New York, there is no suggestion that it would be so difficult as to deprive TradeComet of a fair opportunity to litigate its claims.

I only wish the court had pointed out that Google enters into an incredible number of these agreements.  Whatever burden ex post it places on each of Google’s counterparties that the terms be identical between the contracts and that they specify Google’s “backyard” as the venue for any litigation, the magnitude of the burden it would impose on Google to separately negotiate and track terms for each advertiser and to litigate each agreement in a different court is several orders of magnitude larger.  I can see no reason whatever that a court should ever entertain an argument to invalidate such terms.  The unconscionability argument is, well, unconscionable.

UPDATE:  Aruna Viswanatha at Main Justice is also on the case, as it were.

Geoffrey Manne

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President & Founder, International Center for Law & Economics